Ashford Hospitality Trust Shares Plunged: What You Need to Know
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Seems like everything is down today, but Ashford Hospitality Trust (NYS: AHT) is down more than most -- 22% and counting. Yowza.
So what: The hotel REIT reported second-quarter "earnings" last night. I put that in quotes, of course, because what Ashford actually reported was a $1.4 million loss in "funds from operations." For a more traditional earnings-per-share perspective of how it did, Ashford says it lost $0.49 per share under GAAP -- that's as opposed to the $0.06-per-share profit it earned a year ago.
Now what: This news may not repeat (but it does seem to echo) the bad news out of fellow high-end hotelier FelCor Lodging Trust (NYS: FCH) from earlier this week. Revenue per available room was up in both cases, yet neither company managed to turn a profit on the extra business. In that regard, Ashford investors might find FelCor's promise of even more losses later this year worrisome. Analysts are predicting Ashford will turn a profit by year-end. Then again, they used to think the same thing about FelCor.
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At the time this article was published Fool contributorRich Smithdoes not own (or short) shares of either company named above. The Motley Fool has adisclosure policy. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
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